You pay Social Security taxes on your earnings up to a certain amount. That amount increases each year to keep pace with wages. In 2011, that amount is $106,800.
You pay Medicare taxes on all of your wages or net earnings from self-employment. These taxes are used for Medicare coverage.
|If you work for someone else||2011 Social |
|Your employer pays||6.2%||1.45%|
|If you are self-employed|
Where your Social Security tax dollars go
When you work, 85 cents of every Social Security tax dollar you pay goes to a trust fund that pays monthly benefits to current retirees and their families and to surviving spouses and children of workers who have died. The other 15 cents goes to a trust fund that pays benefits to people with disabilities and their families.
From these trust funds, Social Security also pays the costs of managing the Social Security programs. The Social Security Administration is one of the most efficient agencies in the federal government, and we are working to make it better every day. Of each Social Security tax dollar you pay, we spend less than one penny to manage the program.
The entire amount of taxes you pay for Medicare goes to a trust fund that pays for some of the costs of hospital and related care of all Medicare beneficiaries. Medicare is managed by the Centers for Medicare & Medicaid Services, not Social Security.
August 22, 2010
The National Debt Awareness Center advocates reduction of the National Debt and replacement of federal income tax with a national retail sales tax. NDAC does not support any political party. Click here for more information about the National Debt Awareness Campaign.
The National Debt is $13.3 Trillion!
U. S. Treasury Department report to Congress: U.S debt to rise to $19.6 trillion by 2015.
--- Updated 22 August 2010---
The bar chart is created using data taken directly from the Monthly Treasury Statement and from the historical tables published by the U. S. Treasury Department. Your money is spent through U. S. Senate Appropriations Bills.
--- "Deficit" vs. "Debt---
Suppose you want to spend more money this month than your income. This situation is called a "budget deficit". So you borrow (ie; use your credit card). The amount you borrowed (and now owe) is called your debt. You have to pay interest on your debt. If next month you don't have enough money to cover your spending (another deficit), you must borrow some more, and you'll still have to pay the interest on the loan. If you have a deficit every month, you keep borrowing and your debt grows. Soon the interest payment on your loan is bigger than any other item in your budget. Eventually, all you can do is pay the interest payment, and you don't have any money left over for anything else. This situation is known as bankruptcy.
Top Ten Budget Time Bombs.
*** Please note that Congress "deemed" the FY2011 budget (as part of the "War Supplement Bill"), meaning that the Presidential Budget Proposal for 2011 was completely thrown out by Congress, so we have no budget for 2011. What we have is essentially a "continuing resolution", meaning that Congress can continue spending without the guidelines of a budget.
As of 11 July 2010, there are indications that President Obama may actually veto this bill. [Deemed means "don't do it, but say we did".] The Congressional Budget Office reports on the Federal Debt and the Risk of a Financial Crisis in this new report.Your money is spent through Appropriations Bills passed by The U. S. Senate and signed by the President. The Government does not have any money, it takes your money from you and, and borrows more, then spends that! The bailouts of 2008 and 2009 are purely deficit spending. Expect to see enormous deficits in the forseeable future, leading to much more debt; and interest payments on that debt will become the largest item in the federal budget. On C-SPAN, President Obama boldly told Americans: "We are out of money."
In 1913, when the Federal Reserve was created with the duty of preserving the dollar, one 20-dollar bill could buy one 20-dollar gold piece. Today, fifty 20-dollar bills are needed to buy one 20-dollar gold piece. Under the Fed's custody, the U.S. dollar has lost 98 percent of its value. The dollar is the storehouse of our wealth. Has the Fed faithfully safeguarded that storehouse? Was it not Thomas Jefferson who taught us,
"In questions of power let us hear no more of trust in men, but bind them down from mischief with the chains of the Constitution"?The Treasury Department has the third largest expense in the federal budget. Only Defense and income redistribution (The Departments of Health and Human Services, HUD, and Agriculture (food stamps)) is higher. As the debt increases, so does the interest payment. Social spending is the largest item in our federal budget. Do you have "Compassion" for lower income earners?
As of 1 August 2010, the Treasury Department spent so far this year $375 Billion of your money on interest payments to the holders of the National Debt. Compare that to NASA at $19 Billion, Education at $53 Billion, and Department of Transportation at $73 Billion.
And here is a great example of Government efficiency in operating a project. And one more. It's going to be much worse this year!
When you buy something, all the companies involved in producing that something and delivering it, were charged a wide range of taxes, and it's part of the cost of everything you buy. The U. S. Leadership is planning to raise all corporate taxes. The price of everything you buy will go up to cover that tax cost increase. You will be paying those corporate taxes! See more on this. Energy Tax!
The "Economic Stimulus" is shifting us from an "economic crisis" to a debt crisis! Consider this; if businesses could print their own money and give it away to customers so they could buy the products, many folks would be happy for a while; but the businesses would go bankrupt. Well, that's what our government is currently doing, printing and giving away money.
Social Security is not part of the Federal Budget general fund. It is a separate account and has its own source of income. Social Security payments do not go into the general fund, they go in the Social Security trust fund, and should NOT be counted as general revenue. The trust fund is supposed to be used to pay future benefits. But....keep reading....
As of August 2010, there is less being paid into the Social Security Trust Fund than is being paid out to beneficiaries. Social Security is now using its "surplus". Government agencies that borrowed from the trust fund now have to pay the money back. But they've spent it. Where will they get it? More bail outs (taxes) coming. And here is a "must read" about the problem.
Here is a link to the Social Security Administration's FAQ page about the Trust Fund, and their latest Report (August 2010).
Beware the term "Social Security Surplus"; there is no such thing. Social Security is a Ponzi Scheme, there is never more in the Trust Fund than will ever be needed.
Social Security must be fixed. Here is a debate page. And here is more information on the Root Problem with Social Security.
For more information on the federal budget, and for breaking news regarding new taxes and Social Security, go to the National Debt Awareness Center website: